Moscow, Lagos and New York are the world's most expensive
cities for corporate hotel programs, according to a biannual report released Thursday
by Hogg Robinson Group. The travel management company uses a combination of
actual room nights booked by HRG clients and industry intelligence to create
The Russian capital has been the priciest city for nine
years now, and 2012 corporate hotel rates in local currency increased by 5
percent year over year. In New York, rates increased by 2 percent. Rates were
flat in the Nigerian city of Lagos, where some new properties opened but
"most corporate visitors use five-star hotels," according to HRG, as "security
remains a major concern for business travelers in Africa, especially in Lagos."
The world's largest corporate hotel rate percentage increases
occurred in Rio de Janeiro (19 percent) and São Paulo (15 percent), although
currency fluctuations negated the overall effect on international corporate
travelers. Hotel room rates throughout Latin America have "increased
significantly as business travelers turn their attentions to the lucrative
opportunities in the region," according to HRG.
Corporate hotel rates generally rose in major U.S. cities,
particularly San Francisco (10 percent), Atlanta (8 percent) and Houston (7
percent). San Francisco and Atlanta each benefited from several citywide
conventions and little supply growth, while Houston was boosted by the strong
oil and energy industries. Rates in Washington, D.C., however, plummeted by 14
percent due to decreased corporate demand.
"In North America, hotels approached negotiation season
with a very bullish attitude, leading to high rate rises," according to HRG.
"Hotels are also paying more attention to cancellation deadlines, which is
placing a further squeeze on rates. With a lack of openings due to the major
groups focusing on other parts of the world, the squeeze on rates is likely to
The picture was mixed in Europe. Corporate hotel rates
largely decreased in cities in countries with fragile economies, including
Dublin (down 4 percent) and Athens (down 7 percent), or were volatile. In
Barcelona, for example, year-over-year hotel rates were down 39 percent in the
first quarter of 2012 but up 32 percent in the last quarter. Other cities had
modest rate growth, including Berlin (5 percent), London (5 percent) and Frankfurt
Hong Kong remained the most expensive city in Asia and the fourth-most
expensive in the world despite corporate hotel rates in 2012 changing little
year over year. Corporate hotel rates dropped in several Indian markets,
including Bangalore (down 12 percent) and New Delhi (9 percent), a combination
of a slowing Indian economy and increased supply, along with switches by several
corporations to house travelers in serviced apartments instead of hotels.
Corporate hotel rates in Beijing rose 3 percent, a more
moderate increase than in past years, as the city becomes a "relatively
well-served and mature business travel destination," according to HRG.
Rates decreased by 7 percent in Shanghai as a result of the glut of hotels
built for the 2010 World Expo.
In the Middle East, Dubai was the most expensive city and
saw corporate hotel rates increase by 2 percent.
"After several years of decline, room rates in Dubai
are increasing as business travelers are now beginning to return,"
according to HRG. "With many high-profile hotel projects effectively
mothballed over the past two years, the lack of new capacity has now begun to
squeeze supply. Several new hotel openings in quarter four eased the pressure
on existing capacity, but issues of availability are still particularly acute
in the long-stay corporate apartment sector."
Corporate hotel rates largely decreased across the rest of
the region, particularly in Abu Dhabi (down 11 percent) and Istanbul (down 10
percent). Istanbul has suffered from increased supply and a drop in demand due
to unrest in its neighbor Syria, HRG reported.
On the whole, corporate hotel rates in 2012 increased by 1.4
percent globally and rose in 32 of the 55 cities with the highest hotel rates,
according to HRG.